China Evergrande New Energy Vehicle Group's stock price surged more than double on Monday, May 27, as trading resumed.
This comes after the announcement that the company's liquidators had reached an agreement to sell a stake in the electric vehicle (EV) business on behalf of key shareholders.
EV Unit Shares Rise Following Report of Stake Sale Deal
The EV division of troubled developer China Evergrande saw its share price rocket 113% to HKD0.81, reaching levels not seen since September 22, as reported by Reuters.
The China Evergrande Group, Evergrande Health Industry, and Acelin Global liquidators have reportedly reached a non-binding agreement that allows a third party to acquire 29% of the EV business, with an additional 29.5% available as an option, according to an announcement on Sunday, May 26.
All three of them own 58.5% of the financially troubled EV company, whose manufacturing ceased in the northern city of Tianjin at the beginning of 2024.
The term sheet also indicated that the prospective buyer would provide a credit line to finance the company's operations and growth.
Hong Kong Court Ordered Liquidation of China Evergrande Earlier This Year
The world's most indebted real estate developer, China Evergrande, was ordered to be liquidated earlier this year by a Hong Kong court after a failure to negotiate an arrangement with its creditors. As a result of the court's decision, creditors may now seize its assets.
The real estate behemoth, which is saddled with around $300 billion in obligations, ceased making payments on its loans more than two years ago and has since been engaged in restructuring talks with its creditors.
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